Stigmatized Properties

Questions arise about obligation to disclose whether property has stigma

Bob Aaron in Legal, Home Buying, Home Selling

HiRes
Is a real estate agent obligated to disclose to purchaser clients whether the house they are interested in buying is stigmatized by a connection to a crime, murder, suicide, marijuana grow-op or haunting by ghosts?

That’s the question that arose late last year when I wrote about a court case in which the buyer unsuccessfully sued the seller following rumours that the building was haunted.

In the view of the Real Estate Council of Ontario, the provincial regulator of the profession, there is no obligation for an agent to disclose the existence of stigma to buyers.

A registrar’s bulletin entitled “Stigmatizing Issues” is published on RECO’s website at reco.on.ca. The bulletin is a guideline for real estate agents and is also useful to help members of the public know what to expect from real estate agents in these circumstances.

As examples of stigmatized properties, the bulletin cites:

  • the property was used in the ongoing commission of a crime (e.g., drug dealing, chop shop, brothel);
  • a murder or suicide occurred at the property;
  • the property was previously occupied by a notorious individual, such as an organized crime figure or known murderer;
  • there are reports that the property is haunted;
  • the house was a former grow-op, which has been properly remediated.

If a real estate agent is not informed about a property’s stigma, there is no obligation to disclose it. I also stated that Ontario agents are obliged to disclose the existence of stigma if they know about it.

After the column appeared, RECO contacted me to say my statements were incorrect and pointed out their bulletin on stigma which states — incorrectly in my view — “there is no legislation or case law in Ontario to suggest that a seller, or his or her representative, is required to disclose the existence of stigmas to buyers.”

But, in my view, that statement is wrong.

original post on http://www.movesmartly.com/

 

I have seen this question come up a lot around grow-ops, I would disagree with the writer of this article in terms of grow ops that have been properly remediated specifically.  If a home was renovated and certified by a city licenced remediator – then the property is in most cases in better shape than it was before the grow op ever existed.  To have realtors out there needlessly narrowing the pool of buyers for these properties is just not necessary.

 

To your success,

Tim R

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About Tim Reid

About Tim Reid

Tim is a sophisticated real estate Investor and Telecommunications Engineer. He has completed projects in Calgary and the US, and has partnered with experts in all areas of real estate.

Tim is also a real estate educator/Mentor who is always willing to help new investors accelerate their business to the next level. Through holistic and custom courses Tim helps investors of all backgrounds reach their business goals faster.